What counts as unaffordable or irresponsible lending?

Lending is generally considered unaffordable or irresponsible where a lender granted credit without carrying out adequate checks to establish whether you could repay it sustainably. Under the FCA's Consumer Credit sourcebook (CONC 5), lenders must assess both the likelihood of repayment and whether the repayments are affordable without causing financial difficulty. In practice this can mean: failing to verify your income, ignoring signs of existing financial stress on your credit file, repeatedly rolling over short-term loans, or increasing credit limits on accounts that showed persistent near-limit or minimum-payment behaviour. If the lending left you unable to cope with essential living costs, or forced you to borrow further just to keep up, it may have been irresponsible.

What types of credit can I complain about?

The FCA's affordability rules apply to most forms of regulated consumer credit, including payday and short-term loans (including rollovers and repeat borrowing from the same lender), overdrafts where you were persistently in or near your limit and the bank renewed or extended it without a fresh assessment, credit cards where the issuer increased your limit without checking whether the higher limit was affordable, catalogue credit and buy-now-pay-later (BNPL) where accounts were opened or limits raised without proper checks, and guarantor loans where the assessment of the borrower's or guarantor's ability to meet payments was inadequate.

What could I get back if my complaint is upheld?

Where a lender or the Financial Ombudsman Service upholds an affordability complaint, the typical remedy includes a refund of the interest and charges you paid on the credit that should not have been granted. In many cases, 8% simple statutory interest is also added to the refunded amount for the period since payment. Where the irresponsible lending led to adverse entries on your credit file — such as defaults, late-payment markers, or County Court Judgements — removal or correction of those entries may also be sought as part of the resolution. The exact outcome depends on the specific facts of your case and the decisions of the lender or the Financial Ombudsman; no particular outcome can be guaranteed.

What rules protect me — and what do they require of lenders?

Two main frameworks apply to affordability complaints. First, FCA CONC creditworthiness rules: Chapter 5 of the FCA's Consumer Credit sourcebook requires every regulated lender to carry out a creditworthiness assessment before granting or materially increasing credit, considering whether repayments are sustainable without causing undue difficulty. Second, the unfair relationship test under section 140A of the Consumer Credit Act 1974: this provision allows a court or the Financial Ombudsman to examine whether the relationship between borrower and lender was unfair, looking at the agreement terms, the lender's conduct, and all the circumstances. Irresponsible lending decisions can contribute to an unfair relationship finding.

Where does my complaint go — and in what order?

You must complain to the lender first. Write a formal affordability complaint letter setting out the product, the dates, your financial circumstances at the time, and the remedy you are seeking. The lender has up to 8 weeks to issue a final response. If the lender rejects your complaint, offers an inadequate settlement, or fails to respond within 8 weeks, you can refer the matter to the Financial Ombudsman Service (FOS) free of charge. The FOS is independent of both the lender and the FCA, and its decisions are binding on lenders. You have 6 months from the lender's final response to refer to the FOS.

Is your complaint letter service really free?

Yes — there is no charge at any stage. We draft your affordability complaint letter, and if the lender rejects it or fails to respond in time, we also draft your Financial Ombudsman Service referral submission. Both are provided completely free of charge. We are not a law firm and we do not provide legal advice. We are a free complaint letter drafting service.

Given Credit You Couldn't Afford? Claim It Back — Free

If a lender gave you a loan, overdraft, credit card, or catalogue account without properly checking whether you could afford the repayments, the lending may have been irresponsible. You may be entitled to a refund of the interest and charges you paid. We draft your affordability complaint — completely free of charge.

Check My Lending Claim — Free

What Is Irresponsible or Unaffordable Lending?

Under the FCA's Consumer Credit sourcebook (CONC), lenders are required to carry out a proper creditworthiness assessment before granting any credit — including loans, overdrafts, credit cards, catalogue accounts, and buy-now-pay-later arrangements. This assessment must consider not only whether you are likely to repay, but whether the repayments are sustainable for you without causing financial difficulty.

Lending is irresponsible or unaffordable where the lender:

Failed to verify your income or carry out adequate checks on your income and expenditure.
Granted credit when your credit record already showed existing debt, arrears, or multiple recent applications.
Repeatedly rolled over or renewed short-term credit without reassessing your ability to repay.
Increased your credit limit — on a card, overdraft, or catalogue account — without a fresh affordability assessment, particularly when your account showed signs of financial stress.
Lent to you when the repayments would have left you unable to meet essential living costs.

If any of these apply, you may have grounds to complain directly to the lender and, if the complaint is rejected or ignored, to escalate to the Financial Ombudsman Service (FOS).

Sound Familiar?

Many people who struggled to repay credit were never properly assessed in the first place. The FCA's CONC rules exist specifically to protect borrowers from this — and the Financial Ombudsman has upheld thousands of affordability complaints against major lenders.

Common Situations Where Lending May Have Been Unaffordable

If you recognise any of the scenarios below, there may be grounds for an affordability complaint.

Payday or Short-Term Loans Rolled Over Repeatedly

Payday lenders are required under CONC to assess whether each loan — including every renewal or top-up — is affordable. If you took out multiple consecutive loans with the same lender, or rolled over a loan more than once, the lender may have failed its duty by not recognising the pattern as a sign of financial distress. Refunds can include all interest and charges paid on loans that should not have been granted.

Credit Card Limit Increases You Didn't Request

Credit card providers have increased limits automatically — sometimes repeatedly — without conducting a fresh assessment of whether the higher limit was affordable. If your account showed persistent near-limit usage, minimum payment behaviour, or other signs of financial difficulty, a limit increase at that point was likely irresponsible. You may be able to reclaim the interest charged on the additional credit you were given.

Persistent Overdraft Debt

If you were in or near your overdraft limit month after month and your bank continued to renew or increase it without any check on whether you could realistically clear it, that may constitute irresponsible lending. The FCA's rules on persistent debt apply specifically to overdrafts and other revolving credit where customers are paying more in charges than they are reducing the balance.

Catalogue or Buy-Now-Pay-Later Accounts

Catalogue credit and BNPL providers must carry out the same creditworthiness checks as traditional lenders. Where accounts were opened or credit limits raised without adequate checks — particularly for customers already in financial difficulty — a complaint can seek refund of interest, late payment fees, and removal of negative entries from your credit file.

Borrowing to Repay Other Debts

If you were using one form of credit to service another — for example, taking a payday loan to pay a minimum credit card payment, or drawing on an overdraft to cover a loan instalment — a responsible lender reviewing your account history should have identified this pattern and declined to lend further. Lending that perpetuated a cycle of borrowing without addressing the underlying unaffordability may be challenged.

No Income or Expenditure Checks Were Made

Some lenders granted credit based solely on a credit score or a declared income figure with no verification. CONC requires lenders to take reasonable steps to verify the information they rely on where it is proportionate to do so — particularly for higher-value or longer-term credit. If a lender simply took your stated income at face value without any verification for a significant loan, the assessment may have been inadequate.

Your Rights as a Borrower

FCA CONC — Creditworthiness Rules

The FCA's Consumer Credit sourcebook (CONC 5) requires every regulated lender to undertake a creditworthiness assessment before granting or significantly increasing credit. This must consider the likelihood that the borrower can repay sustainably — meaning without undue difficulty and without having to borrow further to meet the repayments. Lenders who fail this duty have breached FCA rules and can be required to refund the interest and charges that resulted from the irresponsible lending decision.

The Unfair Relationship Test — Section 140A Consumer Credit Act 1974

Under section 140A of the Consumer Credit Act 1974, a court (or the Financial Ombudsman) can find that the relationship between a borrower and a lender was unfair — taking into account the terms of the agreement, the lender's conduct, and all the circumstances of the case. An irresponsible lending decision can form part of an unfair relationship argument, particularly where a lender continued to extend credit despite clear evidence that you were struggling.

Complain to the Lender First

Before escalating to the Financial Ombudsman, you must give the lender the opportunity to respond. Write a formal affordability complaint setting out:

The specific credit product(s) you are complaining about and the dates they were opened or increased.
The reasons you believe the lending was unaffordable at the time — your income, your existing debts, your repayment history on the account.
What remedy you are seeking — typically a refund of all interest and charges paid on the unaffordable lending, plus 8% simple interest, and removal of any adverse credit markers.

The lender has 8 weeks to respond with a final decision. If they reject your complaint or do not respond within 8 weeks, you can escalate to the Financial Ombudsman Service (FOS) — free of charge.

Escalating to the Financial Ombudsman Service

The FOS is an independent, free service that resolves disputes between consumers and financial businesses. It has upheld a significant proportion of affordability complaints — particularly against payday lenders, catalogue providers, and credit card issuers who increased limits on financially stressed accounts. If the FOS finds in your favour, it can order the lender to refund interest and charges, add the statutory 8% interest, and correct your credit file.

You have 6 months from the lender's final response to refer the complaint to the FOS, so do not delay once a rejection is received.

How Octave Resolution Services Helps

Free Affordability Complaint Letters — and FOS Referrals if Needed

We are not a law firm and we do not provide legal advice. What we do is draft a clear, detailed affordability complaint for you — and, if the lender rejects it, the follow-up submission to the Financial Ombudsman Service. Our letters:

Set out the affordability argument precisely — referencing your income, expenditure, existing debts, and the specific account history that shows the lending was unsustainable.
Cite the correct regulatory framework — FCA CONC creditworthiness obligations, the FCA's guidance on persistent debt, and where relevant the unfair relationship test under section 140A of the Consumer Credit Act 1974.
State the remedy sought — refund of all interest and charges on the unaffordable lending, 8% simple statutory interest, and removal of any negative credit markers attributable to the irresponsible lending.
Give formal notice of FOS escalation — so the lender understands that rejection is not the end of the matter.
Are tailored to your specific lender and credit product — payday lender, high-street bank, catalogue provider, or BNPL firm; each has different account data and different arguments that carry weight.

If the lender rejects your complaint or ignores it for 8 weeks, we draft your FOS referral too. The entire service is 100% free.

What to Gather Before You Start

The more information you can provide, the stronger your complaint. It helps to have:

The name of the lender and the type of credit product (loan, overdraft, credit card, catalogue, BNPL).
The approximate date the credit was taken out, and any dates when limits were increased.
A rough picture of your financial situation at the time — your income, your other debts, and whether you were in financial difficulty.
Any statements or correspondence from the lender if available (though not essential — we can help you request these).

You do not need to have all of this to get started. We can advise on what to request from the lender under a Subject Access Request (SAR) to support your complaint.

Check My Lending Claim — Free

Don't Let an Unaffordable Debt Go Unchallenged

Affordability complaints have a time limit: you generally have 6 years from the date of the lending decision, or 3 years from when you knew (or ought to have known) you had grounds to complain. The sooner you act, the more of your claim may be recoverable.

How the Process Works

Step 1 — Free assessment (2 minutes): Tell us about the credit product, the lender, and your circumstances at the time you borrowed.
Step 2 — We review your case (within 24 hours): We assess the strength of your affordability argument and identify the most effective grounds for complaint.
Step 3 — Complaint letter drafted (within 48 hours): A tailored letter citing CONC rules, your account history, and the remedy you are seeking is prepared for you to send.
Step 4 — You send the letter: We provide clear instructions for submitting the complaint to the lender by email and, where appropriate, recorded post.
Step 5 — FOS referral if needed: If the lender rejects your complaint or fails to respond within 8 weeks, we draft your Financial Ombudsman Service submission — also at no cost.

We are not a law firm and we do not provide legal advice. We are a free complaint letter drafting service. We cannot guarantee any particular outcome. Whether a complaint succeeds depends on the specific facts of your case and the decisions of the lender or the Financial Ombudsman Service.

Check My Lending Claim — Free

Unaffordable Lending Claims — FAQs

Common questions about affordability complaints. This information is for general guidance only and does not constitute legal or financial advice.

What counts as unaffordable or irresponsible lending?

Lending is generally considered unaffordable or irresponsible where a lender granted credit without carrying out adequate checks to establish whether you could repay it sustainably. Under the FCA's Consumer Credit sourcebook (CONC 5), lenders must assess both the likelihood of repayment and whether the repayments are affordable without causing financial difficulty.

In practice this can mean: failing to verify your income, ignoring signs of existing financial stress on your credit file, repeatedly rolling over short-term loans, or increasing credit limits on accounts that showed persistent near-limit or minimum-payment behaviour. If the lending left you unable to cope with essential living costs, or forced you to borrow further just to keep up, it may have been irresponsible.
What types of credit can I complain about?

The FCA's affordability rules apply to most forms of regulated consumer credit, including:

Payday and short-term loans — including any rollovers or repeat borrowing from the same lender. Overdrafts — where you were persistently in or near your limit and the bank renewed or extended it without a fresh assessment. Credit cards — where the issuer increased your limit without checking whether the higher limit was affordable. Catalogue credit and buy-now-pay-later (BNPL) — where accounts were opened or limits raised without proper checks. Guarantor loans — where the assessment of the borrower's (or guarantor's) ability to meet payments was inadequate.

If you are unsure whether a particular product is covered, we can advise when we review your case.
What could I get back if my complaint is upheld?

Where a lender or the Financial Ombudsman Service upholds an affordability complaint, the typical remedy includes a refund of the interest and charges you paid on the credit that should not have been granted. In many cases, 8% simple statutory interest is also added to the refunded amount for the period since payment.

Where the irresponsible lending led to adverse entries on your credit file — such as defaults, late-payment markers, or County Court Judgements — removal or correction of those entries may also be sought as part of the resolution. The exact outcome depends on the specific facts of your case and the decisions of the lender or the Financial Ombudsman; no particular outcome can be guaranteed.
What rules protect me — and what do they require of lenders?

Two main frameworks apply to affordability complaints in England and Wales:

FCA CONC creditworthiness rules: Chapter 5 of the FCA's Consumer Credit sourcebook requires every regulated lender to carry out a creditworthiness assessment before granting or materially increasing credit. The assessment must consider whether repayments are sustainable without causing undue difficulty. Breach of CONC can form the basis of a complaint to the lender and, if unresolved, to the Financial Ombudsman Service.

The unfair relationship test — section 140A Consumer Credit Act 1974: This provision allows a court or the Financial Ombudsman to examine whether the relationship between borrower and lender was unfair, looking at the agreement terms, the lender's conduct, and all the circumstances. Irresponsible lending decisions can contribute to an unfair relationship finding, particularly where lending continued despite clear evidence of financial distress.
Where does my complaint go — and in what order?

Step 1 — Complain to the lender first. You must give the lender the opportunity to address your complaint before escalating. Write a formal affordability complaint letter setting out the product, the dates, your financial circumstances at the time, and the remedy you are seeking. The lender has up to 8 weeks to issue a final response.

Step 2 — Escalate to the Financial Ombudsman Service (FOS) if needed. If the lender rejects your complaint, offers an inadequate settlement, or fails to respond within 8 weeks, you can refer the matter to the FOS free of charge. The FOS is independent of both the lender and the FCA, and its decisions are binding on lenders. You have 6 months from the lender's final response to refer to the FOS, so do not delay once a rejection is received.
Is your complaint letter service really free?

Yes — there is no charge at any stage. We draft your affordability complaint letter, and if the lender rejects it or fails to respond in time, we also draft your Financial Ombudsman Service referral submission. Both are provided completely free of charge.

We are not a law firm and we do not provide legal advice. We are a free complaint letter drafting service. Contact us at nc.octave@gmail.com if you have any questions before getting started.